More Than the Next Shiny Object: Why Coke Is Investing in Wearable Tech

its second wearable
product, Misfit Flash, a versatile and easy-to-use fitness and sleep monitor. To help celebrate this news, we're revisiting our April 2014 profile of the Coca-Cola partner.

Misfit
Wearables launched with a mission to stand out, but has since made its mark in
a competitive category by fitting in.

Misfit was incorporated
in 2011 on the day Steve Jobs passed away. The company’s name was
inspired by a quote from Apple’s iconic 1997 commercial: “Here’s to the
crazy ones. The misfits. The rebels. The troublemakers.
The round pegs in the square holes.”

The
company’s first product, the Misfit Shine, is a sleek, all-metal activity
monitor designed to be worn anywhere on the body, and for any occasion. The Shine integrates seamlessly -- and discreetly -- into users’ lifestyles and
wardrobes.

When the
company launched, wearable computing had yet to crack the mainstream. Just over
a year later, it was the talk of the town in Las Vegas at the 2013 Consumer
Electronics Show, an annual summit of tech tastemakers. Fitness buffs and the
investment community began to take notice.

“We didn’t
start the company to make Shine… it was a pivot,” recalls co-founder and
CEO Sonny Vu, who says Misfit’s primary product has yet to be released. “We saw
how well others in the space were doing and knew we could do better.”

Their first
challenge? To design wearable devices that were more, well, wearable. They
wanted to introduce a degree of style and cachet to a category defined by gadgets
made of mostly plastic and rubber.

“People,
especially women, don’t want to wear dorky stuff,” Vu said. “We knew we needed
to focus on wearability, which includes everything from selecting the right materials
to designing and making something people can and want to wear without
feeling self-conscious.”

Misfit’s
answer, Shine, is made from durable, aircraft-grade aluminum and is about
the size of a quarter. Users can wirelessly sync the water-resistant device,
which is powered by a standard coin-cell battery that lasts up to six months,
to its companion iPhone or Android app by simply laying it on their smartphone screen.

‘We Knew They Had Something Special’

By early 2013, the buzz surrounding
wearable technology caught the attention of The Coca-Cola Company’s Strategic
Marketing Ventures team, which invests in high-potential startups aligned with
Coke’s core business, including digital music streaming service Spotify, social
fitness community Endomondo and music licensing firm Music Dealers. Fitness
bands and other activity monitors motivate people to be more active -- a key
priority for Coke -- by letting users set personal goals and track everything
from steps taken, to calories burned, to sleep.

Bachir
Zeroual, global director of marketing ventures, flew to Silicon Valley with a
few Coke colleagues to meet the industry’s key players, including a
small startup by the name of Misfit.

“We were
searching for an address in Daly City, south of San Francisco, when we arrived
at a small townhouse,” Zeroual recalled. “It was exactly what you picture when you
think of a tech startup. Their head of design came to the door in shorts and a
t-shirt and took us back to the garage, where he walked us through their story.”

Sonny Vu

Misfit didn’t
even have a working prototype of the Shine at the time, but the Coke team saw
potential. “We left with a good intuition,” Zeroual added. “We knew they had
something special.”

When
considering potential partners, Coke focuses on three Ps: People, Products and
Purpose. Misfit had all three.

Zeroual was drawn
to the company’s attention to craftsmanship and creating consumer experiences. Vu’s
pedigree as a successful entrepreneur and product designer was equally
impressive. His previous company, AgaMatrix, invented the first medical device
add-on Apple approved for the iPhone -- a glucose monitor diabetes patients
could use to test their blood sugar levels.

Misfit had a
few rounds of capital under its belt and had just wrapped up a wildly
successful Indiegogo crowdfunding campaign, raising more than $800,000 from
nearly 8,000 people in 64 countries. The Shine had a built-in clientele months
before going into production.

“This told
us that from a technology perspective, they’re solid,” Zeroual adds. “And their
long-term vision to inspire people to be more active by equipping them with the
right technology aligned with ours.”

The Indiegogo
campaign steered Misfit’s focus to design-conscious women. The company
doubled-down on their accessories business (leather wristbands, clips, necklaces
and more) and expanded its focus outside the U.S.

“For our
first iteration, we translated our website, app and packaging into 16
languages,” Vu said. “People thought we were nuts, but it worked. More than 60
percent of our volume is from overseas.”

Zeroual and
his boss, Emmanuel Seuge, met Vu at South by Southwest in Austin,
Texas. Vu -- who missed the initial meeting a few weeks prior due to Bay Area traffic
-- was skeptical at first. Why would a global company like Coke be interested
in his company’s technology?

“We had to
roll up our sleeves and explain our shared ambition to inspire people to be
more active -- what we’d done, what we were planning to do, and why this is
important to us over the long term,” Zeroual said.

Misfit Shine was featured in Coke's 'Get the Ball Rolling' program last summer.

Vu agreed to
visit Coke’s headquarters to meet more of his prospective partners. After just
a few hours in Atlanta, he was sold.

“I had a really
good feeling,” he said. “I could see that Coke was a good company with solid
values. I toured the archives and was wow-ed… I soaked it all up and eventually
said, ‘Let’s go for it.’ And it’s been an amazing partnership ever since.”

The teams
moved quickly to integrate an exclusive Coca-Cola Red Shine into Coke North
America’s MyCokeRewards loyalty program and a summer 2013 campaign, “Get
the Ball Rolling,” as a premium giveaway.

Zeroual
credits Misfit with inspiring Coke to make quick decisions, take risks and embrace
an entrepreneurial mindset.

“When we
suggested the idea of the red Shine -- they were only considering silver at the
time -- Sonny got his manufacturer in South Korea to produce one and send it to
us in four days,” he adds. “The willingness to be flexible definitely rubbed
off on us.”

Misfit also
partnered on Coke’s hospitality program for the 2014 Olympic Games in Sochi, distributing
Shines to Russian Olympians, VIP guests and fans along the Olympic Torch Relay
route. The Shine will play a yet-to-be-disclosed role in Coke’s FIFA World Cup
marketing efforts in Brazil and will be integrated into the company’s employee
well-being program.

“We’re
asking ourselves what we can bring to the experience to motivate users even
more,” he adds. “For example, what if we used music -- a top teen passion point
-- as a reward for physical activity? And 80 percent of teens are not getting the
World Health Organization’s recommended 60 minutes of physical activity per
day. So we have in our hands both a key fact and access to some of the most important assets, properties and
passion points people are looking for.”

Wearables
continue to gain popularity, and analysts expect 50 percent more devices to
reach the market by the end of 2014. Vu predicts wearable hardware such as
activity monitors and fitness bands will soon conflate into wearable computing
platforms such as smartphones and smartwatches, just as mp3 player and GPS
devices have.

“The market
cannot support that many players,” he says, again stressing the importance of
wearability as a differentiator.

“To be truly
wearable, a device needs to be so beautiful people would wear it even if it
didn’t work -- and we think Shine fits that bill -- or it needs to be
invisible,” Vu concludes. “We’re not there yet… but we’re just getting
started.”

Misfit Shine is available for sale in
Misfit’s online store and at the Apple Store, Best Buy,
Target and other retailers in more than 20 countries. The Coca-Cola Red Shine
is sold exclusively in Apple Stories in the U.S.

TheCoca-ColaCompany(NYSE: KO) is the
world's largest beverage company, refreshing consumers with more than 500
sparkling and stillbrands. Led
byCoca-Cola, one of the
world's most valuable and recognizable brands, our Company's portfolio features
20 billion-dollar brands including, Diet
Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, POWERADE, Minute Maid,
Simply, Georgia, Dasani, FUZE TEA and Del Valle. Globally, we are the No.
1 provider of sparkling beverages, ready-to-drink coffees, and juices and juice
drinks. Through the world's largest beverage distribution system,
consumers in more than 200 countries enjoy ourbeveragesat a rate of 1.9 billion servings a day. With an enduring
commitment to building sustainable communities, our Company is focused on
initiatives that reduce our environmental footprint, support active,healthy living, create a safe, inclusive
work environment for our associates, and enhance the economic development of
the communities where we operate. Together with our bottling partners, we
rank among the world's top 10 private employers with more than 700,000 system
associates.